Everyone wins in deal that brings Sesame Street to HBO

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HBO is going to be airing the next five seasons of Sesame Street and it is the best muppet news since we heard Henson’s creations were coming back to prime time television. It’s great news because HBO probably just saved the future of Sesame Street by helping it transition from the broadcast era of television it was produced in to the streaming era of TV that we all currently live in.

Sesame Street is made by the non-profit Sesame Workshop built in New York City. The Workshop is in charge of making Sesame Street episodes that air on PBS, or had for the past 45 seasons. The groundbreaking show was developed as a way to teach inner city children, but ballooned out with PBS’ audience and became an educational staple for the under 13 crowd. Traditionally, PBS and the “viewers like you” funding would only pay for about 10% of Sesame Workshop’s budget to make the show and the rest of the finance gap was made up through licensing and home video (recently DVD but previously VHS) sales.

As the whole world goes to streaming, Sesame Street began to hurt financially. About two thirds of Sesame Street’s audience watches the show digitally-on-demand now, something that is much harder to monetize. A few small deals with Amazon and Netflix allowed some Sesame Street episodes to air there, but the actual production of new shows got slashed to a simple 18 episodes per season, down from episode orders in the 30s during previous seasons.

Enter HBO, whose new streaming service HBO Now has separated the pay cable network from having to own a cable package or a TV. HBO had previously worked with Henson’s muppets on Fraggle Rock, a Henson follow-up to Sesame Street that attempted to do educational muppets for an international audience (Sesame Street was always meant to be a domestic production). HBO thought they could bring some families to the pay cable service as well as boarding the Henson train in the co-production. HBO was just looking for programming in general then, but now post-Fraggle Rock it needs something for the kids to compete with all the other streaming services competing for mommy or daddy’s subscription dollars.

HBO swooped in and funded Sesame Workshop (exact financial details haven’t been disclosed at this time) and locked in five more seasons that will air first on HBO. Because HBO is also the company with Game of Thrones, one of the most popular shows on television, the money is substantial and Sesame Street can up it’s episodes per season back to 35.

HBO will then allow PBS to air the new seasons after a nine month waiting period, so technically Sesame Street stays where it is (if you don’t want to pay for HBO). To cover the stutter-step of the first nine month gap, PBS will re-edit old episodes of Sesame Street into a “new” season that will air on the channel while they wait for the HBO episodes.

HBO is cleaning up with Sesame Workshop, the deal also includes a new spinoff series based on the Sesame Street Muppets and another new educational series for children. The network also licensed over 150 existing episodes of Sesame Street and some episodes of The Electric Company and Pinky Dinky Doo. Licensing those previous episodes means the few that Amazon and Netflix already have are not long for this world: HBO will be the exclusive streaming service of Sesame Street.

It’s hard to see if there is anything but silver lining on this deal which ensures the future of educational muppet entertainment from Sesame Workshop, promises more Sesame Street to PBS for cheaper (if they can wait), and boosts HBO’s competitiveness in the streaming market by legitimately programming for the family (because The Jinx was not for kids).